Korean ride-hailing service Tada to face court hearing over regulatory issues

The Seoul Central District Court is set to open a hearing on Monday on local ride-hailing service provider Tada over allegations that it breaks local transportation law, Bloomberg reported, citing Yonhap News.

Photo credit: Ki hoon

Tada is an app-based service that mainly moves people in larger-capacity vans. It is operated by mobility startup VCNC, a subsidiary of car-sharing app SoCar, which acquired the former last year.

In October 2019, prosecutors indicted VCNC’s chief exec, Park Jae-wook, and SoCar CEO Lee Jae-woong over allegations that the van-hailing service violates the country’s passenger transport service act. The law prohibits companies from operating paid ride services with rented cars, with an exception for rental vans with 11 to 15 seats. The two, however, have not been charged or arrested.

The indictments followed a string of complaints from traditional operators saying that Tada’s service harms Korea’s taxi industry.

Lee said in a Facebook post that about 1.3 million users and 9,000 drivers benefit from Tada, claiming that the van-hailing app is one of the mobility companies that apply AI technology the most.

“This service is allowed by the law. The police decided that this doesn’t violate the law, and the transportation ministry has never ordered us to stop for over a year when the service ran,” he wrote.

VCNC launched Tada in October 2018. It has since gained popularity in South Korea, a market where ride-hailing majors Grab and Uber struggled to gain traction.

SoCar is one of Korea’s largest ride-sharing operators. Earlier this year, it raised US$44 million in new funding from Altos Ventures, KB Investment, Stonebridge Ventures, and SoftBank Ventures.

In addition to Tada, the company will also venture into e-bike sharing after investing an undisclosed amount in Elecle operator Nine2One. Elecle plans to officially launch its service with 350 e-bikes and then expand to 2,000 units by the end of 2019.